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HMRC internal manual

Capital Gains Manual

ETMD: general principles

The general principles within TCGA 1992 to accommodate those within the ETMD are to ensure that where the relevant conditions are met transfers of assets and liabilities etc. are not inhibited by tax law either at the asset tier or shareholder tier. The main effect is to provide for no gain no loss treatment at the asset tier and ‘roll over’ of gains and losses at the shareholder tier.

The main effect explained above does not apply to a transfer of assets held by a UK company through a permanent establishment in another member state to a company in another member state, or where the transactions involve a transparent entity.

All transactions are subject to anti avoidance provisions.

CG45702 - 45717 provide guidance on sections TCGA 1992 140A, C, E and F which cover the transfer of assets etc at the asset tier.

CG45718 - 45721 provide guidance on sections TCGA 1992 140DA, G and GA which cover the ’roll over’ treatment’ at the shareholder tier. For guidance on share exchanges within TCGA 1992 section 135 see CG52521+

CG45722 - 45730 provide guidance on transfers etc. involving transparent entities.

CG45731 - 45732 provide guidance on the anti avoidance legislation relating to transfers etc.

CG45733 - 45742 provide guidance on changes to TCGA 1992 at sections 140, 154, 116, 170 and 179 to ensure that they do not affect the no gain/no loss treatment, and for Sch 7A.